Will Department Stores and Specialty Retailers Join the Custom-sized Apparel Bandwagon?

While there hasn’t been a big push for large apparel retailers to offer custom-sized clothing yet, as made-to-measure startups like Indochino, eShakti and Sumissura gain traction, that will likely change. Today’s consumers expect personalized services and products that are one-of-a-kind. With custom-tailored and designed garments now offered at a fraction of historical bespoke clothing prices, it has created a lucrative niche. Department stores may opt to open stores-within-a-store or pop-up shops with some of these custom-made brands or go direct to overseas suppliers and disintermediate the startups.

Customers will accept a couple weeks lead time for most apparel items, especially if it is custom made for them, as it is worth the wait. Obviously, there are exceptions, if a customer needs a dress for a special event this weekend, she will need to buy something off the rack.

Impact on Margins and Inventory

On an individual item perspective, margins are not necessarily better on custom made clothing than mass produced products. However, you can ensure your overall margin rates on custom made apparel, as you won’t have any obsolete inventory or inventory markdowns. These brands can also increase the overall margin by selling complementary accessories. Tailored clothing can move to more casual styles and rather than customize sizes, consumers can customize the fabric or what is printed on the fabric. For example, Nike and Vans are currently offering custom designed sneakers and consumers are willing to wait 2-5 weeks for the shoes. With 3D printers becoming more agile and affordable, one day we may see most products being built to order with markdowns and obsolete inventory becoming a thing of the past.

Check out this story on PBS about the progress being made on 3D printers: How 3D printing is spurring revolutionary advances in manufacturing and design

As always, I appreciate your feedback on this topic.  Please share your thoughts and opinions below.